Is California Skirting Its Own Law to Hire Out-of-State Contractors to Answer Unemployment Calls?

(AP Photo/Wayne Parry)

When Wendy Leonardo called the California Economic Development Department (EDD) to check on her delinquent disability benefits, her call was answered by an operator she couldn’t understand, who was rude, and who hung up on her. That was after being “on hold for 59 minutes and 31 seconds.” She was lucky to even get through; thousands of Californians have contacted news organizations such as television station KCRA to report that they can’t even get through to a human being despite the government’s assurances that they were beefing up staffing.


KCRA 3 Investigates tried to call the new EDD helpline. We called multiple times over a single day and received a message saying, “We are currently receiving more calls than we can answer and are unable to assist you at this time. Please try again later.”

Each time we called, the same message played, followed by a beep and the line dying.

Another man who was able to get through said the representatives he spoke to were in states far from California.

“I’ve been out of work since last year,” the man said, since “October, November.”

Under the new EDD policies and the federal CARES Act, his benefits should be extended since they had not run out before the act was passed. However, he’s no longer getting his checks. So, he called the EDD helpline.

“I called several times and it’s hard to get there,” the man said. “You gotta call back to back and when you finally get through, the few times I got there, it was somebody in another state.”

He said the two times he’s managed to get through, after waiting on hold, he’s gotten someone answering on a cell phone from outside the state. One call, he said, went to Virginia and another to Alabama.

“They asked me questions as to, ‘Do you get paid weekly? Do you get your benefits weekly or bi-weekly? or how do you get your benefits in California?'” the man said.


Gov. Gavin Newsom announced in early April that the Employment Development Department was ramping up staff and even borrowing staff from other state government departments:

Pursuant to Executive Order N-50-20, California’s Employment Development Department (EDD) is launching a new call center on Monday, April 20, 2020, that will operate seven days a week from 8:00 a.m. to 8:00 p.m. This is in response to the Governor’s order that the agency “take necessary action to ensure staffing sufficient to process unemployment insurance benefits on a timely basis to ensure eligible individuals receive payments efficiently.” The Unemployment Insurance Branch has added staff and will now have 1,340 employees, including 740 EDD employees and 600 employees from across state government, available to assist eligible individuals with questions about filing and/or their claims.

That order doesn’t say that any contractors will be hired, and considering how many people are out of work in the state it would make sense to hire people in California – one less check to process.

EDD spokesperson Loree Levy told KCRA that the department has hired vendors to support the phone traffic. That raises a major question, given that California outlawed independent contractor arrangements starting January 1, 2020, specifically targeting what the bill’s author, Asm. Lorena Gonzalez, calls “labor brokers.” Are these temporary call center operators paid by W-2? Are they afforded sick time, vacation pay, unemployment insurance, workers compensation, and health insurance? Gonzalez is so passionate about all “workers” receiving those benefits that she put tens of thousands out of work to make that point. Or, is California skirting its own law to offer contracts to out-of-state workers that are illegal in California?


KCRA has requested “vendor contracts or employee applications to find out how many call center employees are working from other states, but to date, have not received any of those documents.”

When asked specifically about out-of-state operators, though, Levy replied:

“I can’t confirm that. I don’t have any information on that. What I can tell you is that we have been redirecting hundreds of staff from throughout EDD, and even from state government, to come help us and bring that is evolving daily.”

“Anybody goes on to a phone, does go through several days of training,” Levy said. “Doesn’t matter that somebody within EDD, somebody from another state department or even somebody from some of the supportive vendor staff, they all go through a required set of training. They all have to get our equipment so that they can access the system.”

Levy also said that the newest operators aren’t full-fledged claims representatives, as it takes about six months to train claims representatives.

California EDD and all other state agencies need to be transparent about labor contracts entered into during this pandemic, but it’ll probably take a court order to make them give up the information.


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